The Government Accountability Office (GAO) recently issued to Congress its annual bid protest report. Of particular note, protesters received some relief in 44 percent of the protests. GAO reports this statistic as an “effectiveness rate”—i.e., the percentage of protests where the protester obtained “some form of relief from the agency . . . either as a result of voluntary agency corrective action or [GAO] sustaining the protest.” As the following chart from GAO’s report thus shows, protesters continue to receive some form of relief from the agency in nearly half of the protests filed with GAO:

GAO Bid Protest “Effectiveness Rate” Remains High in FY 2018

The report states that the “most prevalent grounds” for sustaining protests during the 2018 fiscal year were (1) unreasonable technical evaluation; (2) unreasonable cost or price evaluation; and (3) flawed selection decision. By comparison, in fiscal year 2017, the “most prevalent reasons” for sustaining protests were (1) unreasonable technical evaluation; (2) unreasonable past performance evaluation; (3) unreasonable cost or price evaluation; (4) inadequate documentation of the record; and (5) flawed selection decision.

The GAO fiscal year 2018 bid protest report is available for download. If you have any questions about GAO’s report or the bid protest process in general, please do not hesitate to contact Aron Beezley.

Florida Court Finds Arbitration Clause Expanding Authority of Courts to Vacate/Modify Arbitration Awards UnenforceableThe Florida Arbitration Code addresses the confirmation, vacation, modification or correction, and appeal of arbitration awards in Florida. In September, a Florida District Court of Appeal addressed whether parties may expand the scope of judicial review provided under the Florida Arbitration Code. In National Millwork, Inc. v. ANF Group, Inc., a subcontractor sought to void the arbitration clause in its subcontract by arguing that the provision impermissibly expanded the scope of judicial review to include a determination as to whether the arbitrator properly applied Florida law.

The Florida Arbitration Code limits the authority of Florida courts to vacate and/or modify arbitration awards to circumstances when an award is procured by corruption, fraud, or other undue means or when there is evident partiality, corruption or misconduct by the arbitrator. The Florida Arbitration Code also prohibits parties from varying the grounds for vacating or modifying an award.

The appellate court in National Millwork concluded that the subcontract arbitration provision allowing for appellate review of the arbitrator’s application of Florida law fell outside the scope of judicial review allowed under the Florida Arbitration Code. The court relied on the parallel analysis of the U.S. Supreme Court when addressing comparable considerations under the Federal Arbitration Act. As a result, the court reversed the lower court’s order compelling arbitration and remanded for consideration as to whether the portion of the arbitration clause that inappropriately expanded judicial review rendered the entire clause void or whether that portion could be severed from the rest of the clause.

The Florida appellate court’s decision clarifies the scope of permissible judicial review of arbitration awards under Florida law. Many states’ arbitration statutes mirror the Florida statute at issue in this case, and caution should be exercised when drafting contractual arbitration provisions that run counter to a state’s applicable arbitration statutes.

While the inclusion of a “severability clause” into a contract may help avoid rendering the entire arbitration clause unenforceable, that result is not guaranteed. If a court finds that the offending portion of an arbitration clause is integral to the agreement to arbitrate, it may void the entire clause. In such circumstances, a party may unexpectedly find itself litigating an action in state court and unable to take advantage of the arbitration provision duly negotiated by the parties at the start of the project. If you have questions about reviewing arbitration clauses or other contract provisions, please contact Aman Kahlon for more information.

New SAM Registration Rules Effective Oct. 26, 2018The Department of Defense, General Services Administration, and the National Aeronautics and Space Administration recently issued a final rule amending the Federal Acquisition Regulation (FAR) to “update the instructions for registration” in the System for Award Management (SAM) and “clarify the timing of registration” in SAM. More specifically, the final rule, which corrects “inconsistencies in current FAR language,” “requires all offerors (except as provided at FAR 4.1102) to be registered in SAM at the time of submission of an offer or quotation, consistent with the requirements of FAR clause 52.204-8.”

The final rule has an effective date of October 26, 2018.

Please do not hesitate to contact Aron Beezley if you have any questions about the final rule or any other related issues.